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Boeing CEO ousted as 737 Max crisis deepens

reuters.com

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Re: Boeing CEO ousted as 737 Max crisis deepens

#521

Post by jussij »

adrianmonk wrote: post #436
jefe_ wrote: post #114

Boeing was still promising end of year FAA certification for 737 Max as recently as early December. Around that time, they had a spokesperson on CNBC who was asked directly how the outstanding steps (which indicated February at the earliest) aligned with their end of year statements and the position was essentially, 'we've been saying end of year and end of year could still happen.' When your brand is suffering a cri…

At this point, management probably cannot get good information about the state of projects. When a company creates a culture of sweeping problems under the rug, and then tries to go back and change that, it creates an impossible situation for people at all levels of the hierarchy. Where management once told people it was OK to hide things from them, now they've changed the rules and are telling them, hey, show us all…

The other side of this coin is it not good enough to just identify problems.

There is also the need for an organisation wide culture built on processes, procedures and channels that then enables the company to quickly and efficiently find solutions to these kind of problems.

When a company for a long time has being building a culture of ignoring problems, the effort required to rebuild that problem solving culture is massive.

It is not helped by the fact that the individuals holding the power at the different levels within the organisation tend to be the ones who oversaw the demise of that engineering culture in the first place.

Re: Boeing CEO ousted as 737 Max crisis deepens

#522

Post by shoo »

qwioeue wrote: post #474
softwaredoug wrote: post #188

Former Boeing employee here[1]: I remember when the company decided to do all 401k matching in Boeing stock in 2009. It seemed like a sketchy, borderline unethical way to keep the stock price afloat. All to say I’m happy to have transitioned all my 401k years ago! [1] I worked in the defense industry. Nothing to do with planes: my company was acquired by Boeing and operated relatively independently.

Boeing stock price today is 337.55. In Jan 2009, it was $42. That's a 8x return. SP500 closed at 3221 today. In Jan 2009, it was about $890 and that is only a 3.6x return. Hindsight is 20/20, but you might've been even happier if you kept all your 401k in Boeing.

You've gotta play considering the probabilities, not score things after the fact based on the realised outcome. To a first approximation it's a good idea to not have any significant part of your wealth coupled to your employment, to avoid situation where a failing company destroys both your employment income stream and your investments in a single event.

C.f. Enron employees with company stock...

Re: Boeing CEO ousted as 737 Max crisis deepens

#523

Post by btilly »

TimTheTinker wrote: post #519
btilly wrote: post #513

Earlier quoted context omitted.

The big wild card here is SpaceX. As with all things Elon, SpaceX is built on a financial pyramid. It either wins big, or loses big. And Boeing is a clear loser if SpaceX succeeds. A rule of thumb is that the rare big projects that will do well starts announcing that they are ahead of deadlines early, and that continues. Big projects that won't do not declare slipping deadlines until they can't hide it, and there is…

What percentage of Boeing's revenue and profits comes from NASA contracts and ULA?

Glancing at 4th quarter 2018 from https://investors.boeing.com/investors/investor-news/press-r... commercial aircraft are about 60% of Boeing's revenue and 65% of its profit.

They do not separate NASA from defense department spending, but government was about 35% of revenue and only 16% of profit.

The rest is consulting.

The upshot is that if SpaceX embarrasses Boeing in space, it is a black eye and a sizable chunk of Boeing's business but not critical. But if suborbital flights replace even a modest chunk of long-haul commercial flights, Boeing will be in a world of hurt.

Consider, aircraft tend to operate for about 30 years. If SpaceX causes a 20% reduction in long-haul flights, it would result in a period of 6 years where nobody wants to buy new aircraft, followed by a resumption in sales at about 80% of the previous volume. There is no way that Boeing is prepared for that kind of business shift.

And SpaceX does NOT have to replace 20% of passenger trips to do it. If only the most profitable few percent of passenger trips disappear, then between more expensive seats and fuller flights, the number of flights will drop by a lot more than what SpaceX does. The impact on Boeing will be outsized.

Re: Boeing CEO ousted as 737 Max crisis deepens

#524

Post by bigiain »

jgalt212 wrote: post #412
jefe_ wrote: post #114

Boeing was still promising end of year FAA certification for 737 Max as recently as early December. Around that time, they had a spokesperson on CNBC who was asked directly how the outstanding steps (which indicated February at the earliest) aligned with their end of year statements and the position was essentially, 'we've been saying end of year and end of year could still happen.' When your brand is suffering a cri…

> When your brand is suffering a crisis of confidence, you don't rebuild it by missing deadlines and dodging reality. has worked for Elon, and now his stock is trading at an all time high. $420

ISWYDT...

Re: Boeing CEO ousted as 737 Max crisis deepens

#525

Post by ThinkBeat »

Something I have been wondering about since this all started.

Where did all the airplanes now being leased to fill the holes left by taking the 738Max8 out of the shedules come from?

It is amazing to me that there was that much available capacity?

Are those airplanes in general older and possibly less safe?

Re: Boeing CEO ousted as 737 Max crisis deepens

#526

Post by AnssiH »

petilon wrote: post #505
AnssiH wrote: post #444

Earlier quoted context omitted.

Boeing 737 was designed to operate with minimal ground facilities and therefore it has low ground clearance for easier access. Airbus A320 has a much higher ground clearance.

In hindsight, should Boeing have increased the Max's ground clearance before fitting it with a large engine? I read that Boeing did not want to do this because that would have meant that the Max would not be compatible with existing airport infra. But if competitor Airbus already has a larger ground clearance then surely Boeing would be no worse off?

I don't think airport infra was the reason, unless maybe they wanted to preserve the low clearance for operating to airports without proper facilities?

One reason was probably that it is technically difficult to fit larger gear as they would not fit in the 737 wheel wells. Or something related to increased height...

But in fact it seems the nose gear was actually lengthened somewhat for MAX, but I guess that was not enough. The MAX 10 will also have longer main gear - it will be telescoping so it fits into existing wheel wells. (per https://en.wikipedia.org/wiki/Boeing_737_MAX)

Re: Boeing CEO ousted as 737 Max crisis deepens

#527

Post by ibeckermayer »

api wrote: post #408
wpietri wrote: post #402

Earlier quoted context omitted.

I've lately been reading about the notion of "managerialism". The book Confronting Managerialism defines it as "What occurs when a special group, called management, ensconces itself systemically in an organization and deprives owners and employees of their decision-making power (including distribution of emoluments) and justifies that takeover on the grounds of the managing group's education and exclusive possession…

An interesting thing about managetialism is that it's basically what made the USSR fail. The MBA is our exact equivalent of the Soviet "apparatchik." We postured ourselves as the opposite of the USSR but in reality US business culture aped a lot of its bureaucratic structure. I've called it Soviet capitalism for some time now.

The author of this article (friend of mine) noticed the same point. See footnote 1:

https://reasonandliberty.com/articles/obamacare

Re: Boeing CEO ousted as 737 Max crisis deepens

#528

Post by frostburg »

remarkEon wrote: post #318
Grimm665 wrote: post #285

Earlier quoted context omitted.

I don't know, space is hard and things go wrong. Just because we've done it hundreds of times doesn't mean we should expect perfection.

Yes it does? These are known engineering problems with known engineering solutions. The explanation from Boeing was that a timer was set incorrectly. This sounds like a trivial error to me (though I'm not a "rocket scientist" just a "kerbal scientist", I guess, but we've been using timers for a long time afaik to properly manage burns to orbit).

Let's take a moment to consider the fact that apparently the MCAS uses input from only one of the two AoA sensors on a 737 MAX and swaps which one it takes the data from after each flight. I can't grasp how everyone involved could fail to realize that this statistically makes it less safe than only having one sensor.

I don't know how much the systemic issues that clearly compromised the design of the plane extend to the design of the capsule, but trivals errors seem to be very possible.

Re: Boeing CEO ousted as 737 Max crisis deepens

#529

Post by gomijacogeo »

ThinkBeat wrote: post #525

Something I have been wondering about since this all started. Where did all the airplanes now being leased to fill the holes left by taking the 738Max8 out of the shedules come from? It is amazing to me that there was that much available capacity? Are those airplanes in general older and possibly less safe?

Older, yes. Generally not less safe (and certainly safer than the Max8 right now). Usually more expensive - less fuel-efficient engines, maybe up against C/D maintenance checks, maybe less efficient cabin layout, etc.

Re: Boeing CEO ousted as 737 Max crisis deepens

#530

Post by ben509 »

gilrain wrote: post #343
ben509 wrote: post #92

Earlier quoted context omitted.

"Golden parachute" is just a pejorative for "severance pay." And, it shouldn't be surprising the person hired to be a company's chief negotiator tends to negotiate themselves a good deal.

That's only technically true. We don't usually think of "severance pay" as being enough to live in luxury, without working, for the rest of your life and provide enough inheritance for your offspring to be significantly privileged. For most of us, severance pay is maybe enough to cover basic living expenses at a lower quality of life for a few months. A difference of that magnitude definitely deserves its own jargon.

The point of jargon, though, is that it's not loaded with value judgements.

> A difference of that magnitude...

This neatly highlights the problem with claiming this is somehow objective: what magnitude, and why? And how is your judgement here objective?

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